The basic forecast scenario of the Eurasian Development Bank assumes the beginning of a period of recovery in economic activity in the member countries of the bank from the second half of this year. Monthly macroeconomic review of the bank says.
In March — April of this year, the negative effects of the COVID-19 pandemic began to manifest themselves clearly in the dynamics of economic indicators of the EDB member countries. The effect of social isolation measures, a drop in external demand and income from export of commodities, disruption of production chains and worsening economic sentiment led to a significant weakening of economic activity in the region.
Inflationary processes in the region accelerated in April.
This is due to the impact of the weakening national currencies on prices in March, as well as due to a temporary increase in household demand for certain goods. The growth rate of consumer prices reached 3.1 percent in Russia, 6.8 percent in Kazakhstan, 5.4 percent in Belarus, 8.6 percent in Kyrgyzstan, 10.6 percent in Tajikistan and 0.9 percent in Armenia.
«According to our estimates, as a result of the current year, inflation in the member states of the bank will remain close to the targets of monetary regulators. A restraining factor in the second half of the year will be a weakening of domestic demand,» the EDB analysts team said.
At the same time, the national currencies of the EDB member states in April partially won back the positions lost in the second half of March.
The strong dynamics of the indicators was facilitated by some stabilization of the situation in the global financial markets.
«The restoration of economic activity in the region will be facilitated by both measures taken by the authorities to support the economy and gradual normalization of the situation in the world, in financial and commodity markets. However, due to the negative consequences of the current crisis, primarily due to weak investment activity, social distancing and a decrease in employment, the recovery process may take a long time,» the EDB said.